XML 26 R11.htm IDEA: XBRL DOCUMENT v3.20.2
Revenue
6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
        Operating revenues is comprised of passenger revenues, which includes fare and non-fare revenues, and other revenues. The following table shows disaggregated operating revenues for the three and six months ended June 30, 2020 and June 30, 2019.
Three Months Ended June 30, Six Months Ended June 30,
2020201920202019
(in thousands)
Operating revenues:
Fare$63,769  $515,696  $385,216  $932,041  
Non-fare67,048  478,734  499,151  900,454  
Total passenger revenues130,817  994,430  884,367  1,832,495  
Other7,712  18,526  25,243  36,257  
Total operating revenues$138,529  $1,012,956  $909,610  $1,868,752  

The Company is managed as a single business unit that provides air transportation for passengers. Operating revenues by geographic region as defined by the Department of Transportation ("DOT") are summarized below:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
(in thousands)
DOT—Domestic$134,373  $890,388  $832,293  $1,644,502  
DOT—Latin America4,156  122,568  77,317  224,250  
Total$138,529  $1,012,956  $909,610  $1,868,752  
The Company defers the amount for award travel obligation as part of loyalty deferred revenue within air traffic liability ("ATL") on the Company's condensed balance sheets and recognizes loyalty travel awards in passenger revenues as the mileage credits are used for travel or expire unused.
As a result of the COVID-19 pandemic, the Company experienced significantly increased customer requests for credit shells, or customer travel funds held by the Company that can be redeemed for future travel, and refunds beginning in the second half of March 2020 and continuing through the second quarter of 2020 primarily due to flight cancellations. The total value of refunds issued during the three and six months ended June 30, 2020 were $77.4 million and $121.0 million, respectively.
The Company expects that the level of requests for credit shells and refunds in the upcoming months will continue to fluctuate and vary as the effects of COVID-19 continue to emerge. In addition, in response to COVID-19, the Company increased the expiration period on some of its credit shells from 60 days to 12 months and waived change and cancellation fees for the Guests who booked travel by July 31, 2020. As a result, the outstanding balance of the unused credit shells (which is recorded within ATL on the Company's condensed balance sheets), as of June 30, 2020, significantly exceeds the balance in the prior year period. As of June 30, 2020 and December 31, 2019, the Company had ATL balances of $452.0 million and $315.4 million, respectively. The balance of the Company's ATL, including the balance of credit shells, is expected to be recognized within 12 months of the respective balance sheet date. Refer to Note 2, Impact of COVID-19, for further information on COVID-19's impact to the Company.
For credit shells that the Company estimates are not likely to be used prior to expiration (“breakage”), the Company recognizes the associated value proportionally during the period over which the remaining credit shells may be used. Breakage estimates are based on the Company's historical information about customer behavior as well as assumptions about customers' future travel behavior. Assumptions used to generate breakage estimates can be impacted by several factors including, but not limited to, changes to the Company's ticketing policies, changes to the Company’s refund, exchange, and credit shell policies, and economic factors. Given the unprecedented amount of cancellations in the first and second quarters of 2020 and the related increase in credit shells provided, the Company expects additional variability in the amount of breakage revenue recorded in future periods, as the estimates of the portion of those funds that will expire unused may differ from historical experience.